Asian markets mostly up

ASIAN markets mostly rose on Monday, with Tokyo surging after the yen hit a near three-year low against the US dollar, while concerns eased that the US Federal Reserve could soon end its loose monetary policy.

Investors in Japan cheered reports that the likely next central bank chief was in favour of aggressive monetary easing.

In other developments, the pound slumped after Britain lost its AAA credit rating. Also, China's manufacturing growth hit a four-month low in February but remained positive, British banking giant HSBC said.

Tokyo surged 2.43 per cent, or 276.58 points, to 11,662.52 and Sydney climbed 0.75 per cent, or 37.7 points, to 5,055.8. But Seoul lost 0.46 per cent, or 9.37 points, to 2,009.52.

Shanghai ended up 0.50 per cent, or 11.66 points, at 2,325.82, while Hong Kong added 0.17 per cent, or 37.64 points, to 22,820.08.

Japanese media said Prime Minister Shinzo Abe was set to nominate Asian Development Bank president Haruhiko Kuroda as next governor of the Bank of Japan.

"There was a little euphoria because we have some clarity over the Bank of Japan and that caused the yen to sharply weaken after the opening," Tim Waterer, senior trader at CMC Markets in Sydney, told Dow Jones Newswires.

The dollar surged to 94.77 yen in early trade, its highest since May 2010, before easing to 94.14 yen in the afternoon, still well up from 93.37 yen in New York late Friday.

The euro changed hands at 124.36 yen compared with 123.18 yen on Friday, while it was at $1.3206 from $1.3189.

Regional sentiment was also boosted by easing concerns over the Fed's bond-buying scheme.

Speculation it would end its quantitative easing program in 2013 had driven markets lower last week. But on Friday US investors began to conclude that the market had "misinterpreted" minutes of the bank's meeting that discussed such a move, said Peter Cardillo of Rockwell Global Capital.

Cardillo expected Fed chief Ben Bernanke to reaffirm the scheme in congressional testimony this week. St Louis Fed president James Bullard told CNBC that the policy would remain in effect for "a long time".

On Wall Street Friday the Dow rose 0.86 per cent, the S&P 500 gained 0.88 per cent and the Nasdaq rose 0.97 per cent.

The pound remained under pressure after Moody's on Friday said it had cut Britain's rating for the first time in history, citing weak growth and rising debt.

The unit sank at one point Monday to $1.5072, its lowest level since July 2010, before recovering to $1.5156. The pound was at $1.5250 before the Moody's announcement.

In China, HSBC said its preliminary purchasing managers' index stood at 50.4 for the month, down from a final 52.3 in January, although it marked the fourth consecutive month of growth after 12 months of shrinkage.

A reading above 50 indicates expansion.

"The Chinese economy is still on track for a gradual recovery," Qu Hongbin, a Hong Kong-based economist with HSBC said in a statement, downplaying the fall in the index.

Despite the slowdown markets remained buoyant.

"If we got a very strong number it would have strengthened the worries about policy tightening," said Chi Lo, senior strategist Greater China for BNP Paribas Investment Partners in Hong Kong.

On oil markets New York's main contract, light sweet crude for delivery in April rose three cents to $93.16 a barrel in the afternoon and Brent North Sea crude for delivery in April rose six cents to $114.16.

Gold was at $1,587.80 at 0805 GMT compared with $1,579.80 late Friday.